Moving away from GE's heritage in the Six Sigma methodology, GE is riding the transformational wave as the world's foremost digital industrial company.
In an exclusive interview, WOOL speaks to Bill Ruh, Chief Executive Officer for GE Digital, and Senior Vice President and Chief Digital Officer (CDO) for GE, on how the company is redefining itself as a producer of software-driven offerings. He opens up on how the industrial Internet of Things (IIoT) and consumer Internet of Things are not the same, how IIoT is transforming the industrial society, GE's digital inherent culture and much more.
WOOL:Is the economics or technology for the industrial IoT fundamentally different from the consumer IoT?
BR: The consumer Internet of Things (IoT), or what most people think of when they hear the word 'Internet', is vastly different from the industrial IoT (IIoT). What the IIoT primarily does is connect machines and devices in industries such as oil and gas, power generation and healthcare, where there is a mission critical asset value and where unplanned downtime can result in high-risk situations. On the other hand, the consumer IoT tends to include a more superficial asset impact. While this can provide convenience, it doesn't typically create emergency situations if downtime were to occur. The security necessary for the IIoT is much more complex and, in comparison, the volume of data you are dealing with jumps from terabytes per day with IoT to petabytes per day with IIoT. We see the industrial IoT as a $225B opportunity versus the consumer IoT, which is $170B.
WOOL: Will the industrial IoT see network effects as more devices, applications, businesses and platforms come on board?
BR: Yes, as far as platforms, applications and solutions are concerned, IIoT is going to bring a tremendous amount of opportunity for growth. Just like what we saw with the consumer Internet, most large-scale machinery will soon be fixed with sensors and software controls, all of which will be more and more interoperable. We will see about one billion more digital electric power meters than we did in the past. More than 100 million light bulbs will be connected to the Internet, operated by sensors or smartphones, and machines produced by GE will generate one million terabytes of data per day. Much of it in the form of operational statistics that adjust machines to make them more efficient.
What the IIoT primarily does is connect machines and devices in industries such as oil and gas, power generation, and healthcare, where there is a mission critical asset value and where unplanned downtime can result in high-risk situations. On the other hand, the consumer IoT tends to include a more superficial asset impact.
WOOL: Does design play a heroic role in breakthroughs in the IoT world?
BR: Design, through a digital twin model, is heroic in an industrial setting. To be able to virtually imagine and run a fleet will be a leading role in successful productivity strategies for industrials. Whether it is a thermostat or a jet aircraft engine, there will be some form of connectivity. Performance data has to be collected. This refers to both analytics and physics-based modeling, so that data is not just analyzed, but is also delivered to a machine or an individual to improve its performance. Design is critical to creating digital twins that serve both purposes.
WOOL: Do you find it easy to evangelize the Industrial IoT inside GE with the leaders or with their customers?
BR: I get to do both and that is the most exciting part! We started this journey internally to help GE become more productive as an industrial company. In fact, we call it GE for GE. It was on that journey that we discovered that there really wasn't a right solution for the unique needs of industrial companies. Since the internal teams are where it all began, I love talking to them. But I'm also excited to be able to share what we've learned internally and help our customers apply that to their own businesses. We're all in this together.
WOOL: What is the biggest adoption driver for IIoT?
BR: The ultimate goal for any industrial company is zero, unplanned downtime. If we can help our customers by providing them with valuable insights to manage assets and operations more efficiently, then they too will act fast to make a difference right away.
WOOL: Are the stakes for cyber security much higher in the IIoT world?
BR: The emergence of the Industrial Internet has fundamentally changed the way we look at cyber security and created the need for a tough approach towards it. Industrial-based businesses can't afford to ignore the threats that arise when devices are connected to the Internet because there is an increased dependency on automated and connected systems in our daily lives whether in electricity, natural gas, telecommunications, healthcare or transportation.
For the sake of reliability, not everything can run on the Cloud. A good amount of processing has to take place closer to the scene of activity.
Most businesses also struggle to secure their assets against a cyber attack. When a thermostat fails to work, it is a nuisance. When an electric grid goes down because of a cyber attack, it's detrimental. For the sake of reliability, not everything can run on the Cloud. A good amount of processing has to take place closer to the scene of activity. There will be an enormous amount of computer processing that takes place next to industrial activity, to ensure that there are no concerns or fears about being disconnected. Every power plant will be a big data center that will generate electricity. Every locomotive will be a data center on wheels.
Unlike other IoT and enterprise platforms in the market, GE's industrial application platform, Predix, is built exclusively for the industry, providing GE and its partners with a platform designed to meet the unique strength, scale and security requirements of industrial data.
WOOL: Why did you pick Open Source for implementing Predix?
BR: We believe in the need to be open. Yes, there are certain things that require to be owned in the platform because they are specific domain knowledge that GE has for the industry. But some parts are just fine to be open source and we need the best of everything.
Moreover, Predix needed a framework that allowed for the implementation of a secure, high performance cloud that could be easily extended with many services. To serve this purpose, Cloud Foundry, an open source framework for creating cloud platforms, provides all the software plumbing to enable construction of the Predix cloud.
WOOL: Startups are considered to be more nimble and innovative than large enterprises. How did GE break the mold?
BR: One of the biggest advantages of a startup is flexibility. But as a big company, we have the advantage of scale. With around 300,000 employees worldwide, GE is definitely not a startup. But its open innovation strategy ties into a bigger internal push at the company to adopt a Lean Startup mentality and management style. In fact, we have the ability to make a great idea work fast. We adopt some of the work styles of a startup. A case in point is our FastWorks approach to innovation a framework for entrepreneurs that builds on the Lean Startup idea. With an increased focus on open innovation, GE has created a culture where new, unexpected ideas can blossom without getting stuck in bureaucratic loopholes.
WOOL: Are you fighting the Innovator's Dilemma when it comes to cannibalizing your established market?
BR: What GE is going through right now is the largest transformation in its history. We're returning to our industrial roots and driving the next wave of innovation, which is to become the first digital industrial company. We really asked ourselves: Do we want someone else to be better at managing our machines, or do we want to figure that out ourselves and be the best at it for ourselves and our customers?
WOOL: When is culture an asset and when is it a liability?
BR: At GE, we see culture as an asset; as the cornerstone of our success. As we've worked to define a digital industrial culture, we've found shared accountability to be critical. A culture that doesn't buy into change fast enough, doesn't leverage scale and is not actively fostering change throughout the organization, is a recipe for failure and, thus, becomes a liability.